Newspaper articles describe heavy withdrawals (runs) at branches Dec. 11, 1930, followed by the New York State Superintendent of Banks taking possession (suspension) Dec. 11, 1930. The institution never resumed normal operations and was liquidated; directors and officers were later indicted. OCR errors in some articles were present but did not obscure core facts.
Events (3)
1.December 10, 1930Run
Cause
Rumor Or Misinformation
Cause Details
A neighborhood merchant tried to liquidate stock; patrons misinterpreted advice about selling stock as meaning the bank was unsafe, triggering lines and heavy withdrawals.
Random Run
Yes
Random Run Snippet
Small merchant advised selling stock; patrons misunderstood this as withdraw money.
Measures
$3,000,000 in cash rushed to a branch in armored trucks; police and mounted units deployed to control crowds.
Newspaper Excerpt
the throng at the Bronx office grew rapidly as a report spread ... small neighborhood merchant ... advised his patrons and friends to get rid of their stock, but they interpreted this to mean to draw their money. $3,000,000 was rushed out to the office in armored trucks.
Source
newspapers
2.December 11, 1930Receivership
Newspaper Excerpt
Bank of United States Placed in Hands of State Department After Run. Notice on the door of the office ... (Signed) JOSEPH BRODERICK of ... Large Deposits ... the bank was closed and taken over by the state banking department.
Source
newspapers
3.December 11, 1930Suspension
Cause
Government Action
Cause Details
State Superintendent of Banks took possession of the bank after heavy withdrawals and discovery of unsafe financial condition reported by examiners.
Newspaper Excerpt
New York. Dec. 11. The ... State Superintendent of Banks took possession of the Bank of United States institution.
Source
newspapers
Newspaper Articles (25)
1.December 11, 1930Free LanceHollister, CA
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Bank With 212 Millions In Deposits Taken Over By State
NEW YORK. Dec. 11. The biggest banking setback in decade was made known here today, when the N. Y. State Superintendent of Banks took possession of the Bank of United States institution. financial institution started in 1913 but having no connection with the Federal Government. The bank has $212,000,000 on its deposit books, and 59 branches throughout New York State, with depositors from all walks in life, including small savers and big business houses. Leading financial figures, Including representatives of the House of Morgan. worked futilely all last night trying to ararnge merger or plan to save the bank from crashing, after heavy run of withdrawals yesterday.
Transamerica Hits 12%
SAN FRANCISCO, Dec. 11.hit new low for all time today, when 25,000 shares were traded on the local exchange at price of 12%. The entire list of stocks dipped after the sale was quoted.
Employees Get Bonus
At the same time, Bank of America president Mount announced payment of bonus totalling $500,000 among employees on December 15th, in addition to the $1,300,000 distributed among Bank of Italy employees on July 1st last.
2.December 11, 1930Daily NewsNew York, NY
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HARD CASH ENDS RUNS AT ELEVEN BANK BRANCHES
(Continued from page 2) of the eleven branch offices affected by the rush of withdrawals kept an orderly line and there was no disorder. The throng at the Bronx office grew rapidly as a report spread through the neighborhood that the institution's stock faced a decline. Police. tracing the report. ascribed it to a small neighborhood merchant who offered his stock for sale at the branch and was advised not to dispose of it. His desire to liquidate the stock, police say, came as a result of failure of the proposed billion dollar merger in which the Bank of United States was mentioned. The other banks were the Manufacturers Trust company, Public National Bank and Trust company, and the International Trust company. Negotiations were dropped Tuesday following an all-night conference.
Stock Warning Misunderstood.
With nothing more substantial than this, police say, the small merchant advised his patrons and friends to get rid of their stock, but they interpreted this to mean to draw their money. As soon as the lines began to appear at the branch bank and it became apparent that there would be no let-up, $3,000,000 was rushed out to the office in armored trucks. Sight of the bales of money was sufficient to satisfy many of the depositors that their accounts were secure and they departed. As these left, their places were quickly filled by new arrivals who were not acquainted with the situation.
Mounted Cops Clear Streets. At 7 o'clock police passed along the lines advising the depositors to go home and wait until the bank opened in the morning. Their efforts met with little success, however, and when traffic became jammed twelve mounted police were ordered to clear the streets. At a branch at 170th st. and Wythe pl., Bronx, police protection was called at 7:30 p. m. when the crowds blocked traffic. Crowd of 500 persons gathered in front of the branches at Madison ave. and 116th st., Manhattan, and New Lots and Georgia aves., Brooklyn. Those wishing to draw money were told to return this morning when police reserves ordered onlookers away. An order to all precincts was issued at 10:30 last night by Deputy Chief Inspector John Hennessey directing commanding officers to station two patrolmen at branch bank doors at 8 o'clock this morning.
Representatives of the bank, which has headquarters at 5th ave. and 44th st., were still in conference at 3 o'clock this morning with officers of the Federal Reserve bank of New York and members of the banks which had figured in the proposed merger. (Picture on page 28)
NEW YORK BANK FAILS TO OPEN DOORS THURSDAY
Bank of United States Placed in Hands of State Department After Run.
New York that the was hands banking were posted the main office and the branches of the of the of the smaller and the regular opening time this action was taken after flurry of of lasting into the morning New Federal Reserve The has with the but cause action the States when the lower east side Present the new Had Rapid The in and panded total the with Wall only branch in the financial Notice on the door of the office New the United States. 535 Fifth (Signed) JOSEPH BRODERICK of
Large Deposits. On the basis its of September and deposits that deposits considerab duced since While total resources are amount to only one of the city's lead any The bank's officers include Singer, the and Mr. announced that though the was the New distress which closing these banks has offered claims the depositors the extent such claims, properly authenticated.
Laurens Bank Closes. Farmers bank to board of the the hands national bank was closed temporarily four aminer. but was Bryson president. The bank was capitalized
Paper Company and Bank ceiver File Action Companies.
CLAIM AGREEMENTV TED
Col. Lea Charged audylent Use of Liberty Bank Funds in Suit for $166,000. suit on file in chancery court day the celver Publishers. Inc., Nashville, holding pany for the of the MemAppeal, the Journal and Tribune company. necessary. the to the company its investigated. necessary that be named to Appeal, Inc., stock pledged to the Nashville Trust security for $1,500,000 bond Southern purby the Paper the The avers that the Southern violated its ment the trust involving the Southern the Memphis Commercial Appeal, in in said by trust. might could be hindered imperiled.
Col. Lea President. The Commercial Memphis Evening the company the Knoxville Col. Luke Les of Nashville is pres!of the Southern the the Journal and Tribon file today lishers the this the company filed by the MinnePaper company of sota the fair the property for benefit creditors. alleged has The paper 894,000 for newsprint sold the bill the Publishing against company for paper Charge Lea Used Funds Col. defendant filed yesterday by the receiver for of him against him and was that Col. had deposited of deposit had by Central and and then Asheville, to The petition the receiver. the bank. ventures own personal nancial gain and began to the (Continuedon Next Page.)
4.December 15, 1930The San Francisco ExaminerSan Francisco, CA
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Cleared Removal of Menace, Declares B. C. Forbes
By B. C. FORBES
NEW YORK. Dec. 14.-The banking situation in New York has been greatly improved by the closing of the grossly mismanaged Bank of United States. was the known bad condition of this bank that was responsible for the unsettled feeling in New York financial circles. Now that this sore has been cut out, New York feel entirely confident. No other institution was or is in the same shape as was the Bank of United States. A political scandal of the first magnitude is predicted in Wall Street when the inside story of the bank's extraordinary activities is brought to light. that when they began to run out of names to give their 57 varieties, they got hold of Paris directory and used the names of Paris streets. Who was-who sible for lending these "dummy" companies, as Wall Street calls them, $20,000,000 of the bank's money? Who wereresponsible for lending nearly $100,000,000 of depositors' money to real estate interests? Were any of the borrowers, contractors, etc., affiliated or connected in any way with those with the bank?
Here are questions the stockholders' protective committees will dig into and want answered: How came it that such title, Bank of United States, was granted by the State Superindent of Banks over the protest of the lawyer sent to Albany by the most influential bankers in New York, who pointed out that such title would mislead the ignorant into believing that the institution was run by the United States government?
Who was responsible for the report, as finally prepared, covering the State Bank Examiner's investigation of the bank last June? By what unique coincidence were the bank's losses figured out as equaling. to penny, the institution's total surplus? Had the losses been given as one dollar more, the State banking law would have required that the capital stock be made good immediately or the stockholders be assessed.
Who was-rather, who wereresponsible for the lodging of $2,500,000 official New York City deposits in the Bank of United States, of which only $1,000,000 was withdrawn before the bank closed? Whose judgment left $1,500,000 in that weak bank when such banks as the National City, the Guaranty Trust, the Bankers Trust and the Chemical Bank each had no more than $500,000? (The Chase Bank. carrying city checking account, was in dif ferent category.)
What purpose underlay the or ganizing of no fewer than 57 subsidiary companies by the Bank of United States people? It is said
What were the financial dealings between the Bank of United States and the Bankus Corporation, its adjunct, which, together with the bank, had hand in organizing company after company carry on various multifarious activities, including borrowing and lending to and fro?
Just when did the State Superintendent of Banks first receive an unfavorable report on the Bank of United States from his own examiners? What did he do about such first unfavorable report? And how long did It take him to institute corrective measures? Who sible for opening a'new branchand taking money from innocent three weeks of the bank's suspension?
New York bankers have long complained that the Bank of United States was favored above all others by the political powers that These wondered who befriended this "outlaw" bank. as they called this institution because kept itself outside the New York Clearing House and thus removed itself from the very strict discipline imposed upon Clearing House banks. Responsible bankers now won der whether it was not the political favor enjoyed by the bank which ultimately proved to have been earned and retained at too high price to the bank's depositors.
Happily, no other New York bank is similarly circumstanced. The New York banking position today is the strongest it has ever been in all banking history. Now that the Bank of United States menace has been removed. the sky has cleared and bankers predict distinctly brighter days.
5.December 26, 1930The Brooklyn Daily TimesBrooklyn, NY
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STATE TO PROBE REDS' ACTIVITIES IN BANK CRASHES
Fraud Bureau and Banking Dept. Keep Close Watch on Communists Here.
Two State the Bank ing Departme Fraud reau of Attorney General's fice. are watch to. day activities of Communists officially held responsible measure for the of two the first of month. attempted attack on third which checked after had been started. Strong on the of the Department discovery the third plot revealed today by an official of the in ing the run after line of about 1,000 depositors had formed in front on of the branches this bank line the depositors fears Banking Department official learned last of Com munist campaign being discussed to launch the attack on this institution
Run Checked Within hours this learned. the but it quickly nothing regarding learned by the general With this example them coupled the runs on the Bank of United and the naBk & Trust officials are convinced of strong to one bank with faiding the munist world revolution against capitalism and all its instiWatson Washburn assistant At. torney General charge bureau. questioned heads eight brokerage houses and their records. out for other and relating to deals in bank time in pressing charges against brokers whom find had slightest connection whispering and against he said He question 100 brokers about Chelsea Bank trading. learned today that District Attorney of New County also taking an interest in the
To Probe Red Activities
Assistant Attorney Charles Pilatsky has directed look into activities of Communist to foundation for that the Reds are plotting against the and he has quietly tracing calls depositors bank to withdraw their Broderick of the banking questioned garding reported run on the third Institution run there was that one being ed. by to thousands of depositors another two or three days, the said, he would be in position to make complete statement the conditions of the bank He 80 far he knew no tion was done the of the Bank of "nited States He denied he had issued that the Chelsea bank were assured of 100 on the dollar He had not discussed this phase he and would no on until his was to tonight Girls Commercial H. 883 Classon to discuss Max D. Steuer. chief counsel for the Depositors tion. is to make revelations startling made to broadcast his remarks
6.December 27, 1930The Brooklyn Daily TimesBrooklyn, NY
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FRAUD
Page) officers of the bank had enriched themselves through stock manipulation. He charged. as he had done previously, had Sept. and Dec. 11, when the State Banking Department closed the Institution. He declared either the bank did not have $7,000,000 in undivided profits reported on Sept. if it did the directors and officers must tell what became it. 'No institution with undivided profits can be bankhe He added they had money. must be somewhere had dis. appeared. they did not have he said. the "door the jails about to If they did and disappeared. he said, "then the doors to the jail are still open." Steuer Demands Explanation Mr. Steuer called for explanation of an item in the September 24 report to the State Banking partment listed discounts and totaling $123,000,000. He said his investigation had convinced him there were no such assets, and the merely the amount of worthless paper held by the bank form of notes from depositors who had bought units of Bank of United Corp., virtually forced on them by officers of bank. believe it may be possible the bank had paper to this amount," said Mr. Steuer. "Paper, paper, paper! You depositors did not put in paper. You put in money, hardearned money, real money. paper did they have for How much are you going collect for this Getting down the officers of the closed institution. he named Bernard Marcus, president: Paul Singer, vice president, and Stanley Mitchell. chairman of the board Charging "these men have enriched themselves to the extent of by manipulating the stock of the bank and its affiliates. Mr. added "they lied to the people they said they had $123,000,000 discounts when they knew they had nothing of the sort." The association's counsel told his hearers he had called on Superintendent, Broderick, of the banking department, to the report of his examiners of the conditions of the bank and the request had been denied. He would see them, he said, for he would apply to the courts to compel Mr. Broderick to disclose the information. Hits "Whispering Campaign" In closing address he begged those attending the meeting to lose faith in banks or the nation. There were laws, he said. which would protect them. He asked that they pay no attention to "the whispering campaign" and to take no part such campaign. Mr. Steuer disclosed he and others had conferred Bennett and had been assured Mr. Bennett would start an investigation he took over the office of the State Attorney General. Today's session with Mr. Bennett merely put the matter before him formally in the form
7.January 2, 1931The Producers NewsPlentywood, MT
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ANOTHER BANK
(Continued from First Page) blame the closing of the bank On Monday night the officials the arrest two depositors for "spreading false rumors did prove false this morning when positors branch alone tried their money. order to try stop the run the bank Broderick issued which he said. plenty of money satisfy This proved lie. There was plenty money the depositors wait 400,00 Bank of are waiting. Examiner Peddles Lies
The fact that the run the bank continued after Broderick's shows that the people are losing faith the of when come question of the money this $25,000,000 bank within weeks after the of the Bank the heart the financial center United States shows the of the crisis and effects the banking There already been 1100 bank failures 1930, with assets 700 million dolinvolved. This exceeds ords the history of the United States.
Depositors Total The total number of depositors New bank fail and with families they represent more Run Started by Rum Seizure reliably that the closing the was by the recent capture officials several large cargoes of liquor, the which been financed by the bank officials.
TEN MORE IN THE SOUTH
Memphis, Tenn., Dec. banks eleven northeast Mississippi towns were closed today. All were within dius of about 30 miles the and uation described local president Peoples Bank Trust Company, Tupelo, the largest of the
8.January 16, 1931Brooklyn EagleBrooklyn, NY
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Lack of Aid by Other Banks
Efforts of Officers to Obtain Accounts of Bank of United States Depositors Brought DiffiTheories Scouted
The Eagle has retained Charles Recht, an attorney of the New York Bar, to act as its counsel and legal advisor in an investigation of banking conditions in New York City. Mr. Recht will give his services free and will also advise depositors in any failed bank. Inquiries should be addressed to The Brooklyn Eagle and not to Mr. Recht.
What caused the run and the closing of the Chelsea Bank and Trust Company, which an outside financial group is negotiating to take over and reopen under another name after supplying new capital? for Banking Superintendent Broderick in midafternoon on Dec. to take over this "Great White Way" institution on whose ledgers appear such names MorGest, Roxy's, Texas Harry Richman latter place frequented dered gambler, Arnold Rothstein? Overshadowed by recordbreaking smash of the Bank the United States, there been little official unofficial taken answer although the funds involved the Chelsea closing are amount volved City Trust collapse. The Chelsea closing involved surplus and deposits the City Trust book without taking account the looting, did not reach $10,000,000.
Chelsea Lacked Support Investigation by the Eagle indithat the for the run and closing the Chelsea the part the bank's officers obtain counts depositors the closed Bank the United States and the failure other banking institutions to give full support when the Chelsea got into acute difficulties. Charles special counsel Eagle in inquiry into banking analyzed the Chelsea run closing 'Reports published the day after
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9.January 22, 1931Chicago TribuneChicago, IL
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CHARGE BANK'S RECORDS FALSE CALIFORNIA BEFORE CLOSING AND PACIFIC
Directors Are Witnesses FARES TO FIT at Investigation.
New York, Jan. cers of the closed Bank of United States concealed the condition of the bank when was near collapse, it brought out at the opening of an One way fare Chicago today. joint state to California or Pacific and county into inquiry the bank's Northwest. Good in suspension is being directed by Attorcomfortable coaches ney Max D. Steuer, who will present chair cars only. his evidence to the grand jury. pointed also to the facts that the bank's books had been falsi$6500 loans had been made without the or approval of the board of and that the One way fare Chicago to minutes of California or Pacific board had since Dec. 12, 1929, Northwest. Good in
33 Witnesses Called. witnesses were Julius Blauner, director of the bank, and Robert director and vice president. They were first the of 33 witnesses, to include other officers and directors of the bank, subpoenaed. Mr. Steuer's Mr. of Blauner Mr. Adamson revealed that on Sept. ten weeks before the bank was closed and taken over by the state banking department, the bank reported in its regular quarterly statement to the epartment that it had surplus of $10,000,000 $7.and in profits, contrary to the findings of examiners of the state banking department, who found not penny in the bank's treasury under these items. Loan Made to Kresel.
It was also brought out by Mr. Steuer that $16,000,000 in loans were granted to the bank's affiliates with- out knowledge or approval of the directors and that a total of $4,510,217 in loans and accumulation indorsements granted to directors of the bank without official knowledge of the board. these loans one was of to Isidor J. Kresel, ney and director of the bank and cial counsel in the appellate division's inquiry into magistrates' courts. Mr. Kresel put up collateral of $190,111. Bernard M. Marcus, president, and Mr. Kresel, it was brought out, virtually ran the bank, with the majority of the directors kept in ignorance for the most part of matters with which they are required to be familiar under the One of the outstanding revelations before Steuer was that while Mr. Marcus had reported to the board of directors that the total of what might be termed weak loans was not above $600 or reports of state examiners, produced by Steuer to the surprise of both Mr. Blauner and Mr. Adamson, showed that of loans amounting to $37,498,290. the bank. ing department had criticized as quiring watching and had characterized $14,065,366 as "slow and $9,321,088 as doubtful.
INVESTIGATOR
Of Judges Arraigned
At New York With Seven Bank of United States OfficialsKresel's Bond $10,000
February Kresel of in York Courts answered charging today The signed last as investigator of the arose from Bank of United not guilty to charges resulting suspension but Kresel faced the ordeal of and the he displayed in the Magistrates pigeons Only when Allen shattering all of the reached hand and him how he did Kresel betray his Kresel five held for $10,000 bond the of Bernard Marcus President and Saul Singer Vice the bond was set at Through his attorney, John Kresel issued statement for the confidence of the and his "brethren at the bar He declared his innocence and his belief he would be vindicated Samuel Rosoff. subway contractor submitted to Banking Superintendent Broderick plan for reorganizing the closed bank Under this plan would reopen under new name with $10,000,000 new capital The closed bank has no connection with the Government
11.February 12, 1931The Springfield Daily RepublicanSpringfield, MA
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Milton, lawyer and of John D. Rockefeller, Jr., and H. Satteranother planned to sent to the state banking plan for reopening the bank The plan conceived by Samuel Rosoff, millionaire subway The closed bank has no connection with the government.
12.February 12, 1931Democrat and ChronicleRochester, NY
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HEAVY BONDS SET IN BANK OF U. S. CASE
Marcus and Singer Held in $100,000 Each, But Kresel Bail Is Only $10,000
$50,000,000 SUIT STARTED
Brought Against Bankus Corporation Directors; Move to Reopen Bank Made of corruption in York courts. today indictment charging felony in General Sessions Court. The resigned last night investigator of the magistrates arose from and seven other in the Bank of United States not guilty to charges the bank the ordeal of finger and with the displayed penetrating the defenses vice-squad and Only Judge shattering all dents the court reached his and him how did Kresel betray his feelings very Kresel and five of his associates held for trial in In of Bernard K. Marcus, Saul Singer vicethe bond Through his John W Kresel issued for the confidence his bar He his and his belief he would be At the arraignment today Crain supported his demand for high bail by declaring that misappropriation of more than was charged. One of the Kresel and two others misapplied
Continued on Page Five
13.February 12, 1931The Boston Daily GlobeBoston, MA
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KRESEL ANSWERS FELONY INDICTMENT
Expresses Belief He Will Be Vindicated
Reorganization Plan of Bank of United States Submitted
NEW YORK, Feb 11 (A. P.)-Isidor Kresel, scourge of corruption in New York answered an indictment charging felony in General Sessions Court. The small, quiet man, who resigned last night as investigator of the magistrates bench, arose from sick with seven other in the closed Bank of United States, pleaded not guilty to charges resulting from the bank's suspension. Pale but unruffled Kresel faced the ordeal of printing and "mugwith the same equanimity he displayed in penetrating the of magistra vice squad men, stool pigeons and Only when Judge Allen, shattering all precedents of the court, reached down to shake his hand and ask him how he felt, did Kresel betray feelings. feel very badly," was the lowvoiced reply. Kresel and five of his associates were held for trial in bail. In the cases of Bernard K. Marcus, president, and Saul vice president, the bond was set at $100,000. Through his attorney, John W. Davis, Kresel issued statement asking for the confidence of the public and his "brethren at the bar." He declared his innocence and his belief he would be vindicated. demand that directors of the Bankus affiliate the bank, pay back losses of the corporation, estimated at "upwards of $50,000,000, was in suit for an accounting filed today by the Irving Trust Company. The latter concern is trustee in bankruptcy for the Bankus Corporation. Kresel, Marcus and Singer were among the directors named. Samuel Rosoff, millionaire subway contractor, submitted to Banking Supt Broderick plan for the closed bank. Under this plan it would reopen under new name with $10,000,000 new capital. He declined to discuss its details, but declared had "high-class backers and would yield depositors 100 cents on the dollar.
14.February 12, 1931Press of Atlantic CityAtlantic City, NJ
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Kresel Not Guilty
Resigned Investigator in Bench Quiz Denies gling Bank Funds
NEW YORK, Feb. Kresel, scourge of corruption in New York courts, answered an dictment charging felony in general court today. The small, who quiet man, signed last night investigator the magistrates' from arose sick bed and, seven other associates in closed Bank United States. pleaded not guilty charges resulting from the bank's suspension. Pale Kresel faced ordeal fingerprinting "mugging" with the same equanimdisplayed penetrating the defenses magistrates, vice squad stool pigeons Only Judge Allen, shatterprecedents court, reached down shake hand asked felt, did Kresel betray feelings very badly,' was his voiced reply. Kresel and five of his associates were held trial $10,000 bail. cases Bernard Marcus, president, Saul Singer, president, bond set Through attorney, John Kresel issued statement asking for the confidence the public his "brethren the declared innocence his belief would be dicated. demand that directors of the Bankus affiliate of the bank. back losses of the poration. "upwards $50,000,00" filed today the Irving Trust The concern trustee bankruptcy for the Bankus corporation. Kresel, Marcus Singer among directors named. Samuel Rosoff. millionaire subcontractor, BankSuperintendent Broderick reorganizing closed bank. Under this plan it would open under name with $10,000,000 new capital.
15.February 20, 1931Buffalo Courier ExpressBuffalo, NY
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BANK HEARING CRITICISM
New evidence uncovered to show unfavorable reports were concealed
New York, Feb. evidence recorded today officials of the closed Bank United States from its directors reports state bank exWhereup Max Steuer, inquiry the indicated further be sought. Several officials already have indicted. "Did you know the indebtedness of the the bank by the desaid these should asked Frederick Hobbs, estate man and former director of the bank. Hobbs. Never Heard "Did know the officers plan make these loans were cleared never heard of Steuer Hobbs 1929 erport state bank examiner an affiliate the bank. Hobbs spent fifteen minreading think we were very much deEarlier Steuer asked Herman Metz, director, that the bank had pages "Shouldn't the superintendent banks known about that?" Metz countered. going to find out about exclaimed Steuer.
16.March 3, 1931The News JournalWilmington, DE
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ASSERT BANK MADE NOVENA OF GRACE DEPOSITORS DRIVE BEGINS TOMORROW AWARE OF FAILURE AT CHRIST OUR KING
Steuer Says Bank of Signed 60,000 Patrons in February.
REOPENING IS SOUGHT
(By The Associated NEW Mar. that the Bank United marshaled than 60,000 depositors shortly the State Banking Department issued unfavorable report condition stirred the Steuer investigation today. Morris testified yesterday that high officials had instituted drive more depositors in 1930. and that he himself recruited 1,400 from among his in another "This the most startling testimony yet Deputy Attorney General Max Steuer who delving into the reasons for the Attorney General John H Bennett announced that several directors had started independent movement to recompense depositors 100 cents dollar. either by tive liquidation by reorganization and reopening of the bank.
17.March 25, 1931Seward Daily GatewaySeward, AK
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CASE SET FOR TRIAL NEW YORK, Mar. 24. (AP)-Trial of Issidor Kresal, Bernard Marcus. Saul Singer, Herbert Singer and Henry Pollock, directors of the defunct Bank of United States, was ordered to start March 30.
18.July 11, 1931Evening StarWashington, DC
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# STATUS OF BANKER BILL IS DEFINED
New York Court Rules on Acceptance Matter Involving Contract.
BY C. B. UPHAM.
One of the few court decisions dealing with the problem which arises with the failure of a bank which has acceptnaces outstanding vas handed down this week by the appellate division of the Supreme Court in New York. Because of the scarcity of such decisions, it is of unusual interest.
The business of creating bankers' acceptances, or bankers' bills, as they are commonly called in the New York market, has been largely concentrated in the larger banks of the country in the 17½ years which have elapsed since the Federal reserve act gave to American banks the power to accept time drafts. Consequently the problem has not been an acute one, since few failures have occurred among the larger banks.
# Origin of Case.
The present case grew out of the failure of the Bank of United States in New York City. A New York silk house had bought silk from a Japanese seller and had arranged with the Bank of United States to accept the seller's 90-day draft. Between the time of acceptance and maturity of the draft the bank failed. It sought to collect the amount of the draft from the New York silk merchant under the acceptance agreement, but refused to use such funds for the specific purpose of retiring the acceptance, which it had dishonored, desiring rather to increase its general assets by that amount.
The silk merchant paid the Japanese seller for the merchandise, receiving the dishonored acceptance in exchange. The attempt of the bank, in the hands of the State Banking Department, to compel the silk merchant to pay it the amount of the draft, as agreed upon in the acceptance agreement, failed. The court held that the refusal of the bank to honor the acceptance at maturity constituted a failure of consideration under the agreement.
The suit involved only the rights of the bank and its customer under the letter of the credit agreement. There was no third party bona fide holder of the draft in the case. There was no right of set-off involved, there being no indication in the court opinion that the silk merchant was even a depositor of the Bank of United States, although it is not good banking practice to establish letters of credit for account of non-depositors.
Upon whom should the less fall in a situation of this kind? In discussing this matter before the recent convention of the American Institute of Banking, Wilbur Ward, an officer of the National City Bank of New York, declared that merchants and bankers would probably be of the opinion that the buyer should bear, and not pass along to the depositors, the loss attendant upon the inability of the bank to retire an outstanding bill accepted for his account. He should be penalized for choosing an unsound bank, Mr. Ward said.
# Result of Decision.
The court in the Bank of United States case apparently considered that a contract was involved to which there were only two parties. The bank, it apparently reasoned, agreed to do a certain thing for its customer and failed to do it. Therefore, such reasoning concludes, the customer is excused from performance of his part of the contract.
What the court failed to take into account, evidently is that now, since the bank is not actively in operation, its depositors and other creditors have an interest in the matter. The practical result of the decision is that one creditor of the failed institution, the holder of the acceptance, recovers in full, while other creditors take pot luck.
(Copyright, 1931).
19.July 31, 1931Brooklyn EagleBrooklyn, NY
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Corn Exchange Bank To Open New Branch
The Corn Exchange Bank Trust Company today announced will open its Colonial branch Columbus Ave. 81st St., Manhattan next Monday George 8. Carr will be in charge of the office This was formerly branch of the Bank of United States was sold to Corn Exchange by the Raw Silk Futures State Banking Department in liquidating the closed institution Prices York Exchange Before merged by the Bank High Last of United States it was the Colonial 2.25 2.25 2.25 2.27 Mr Carr was vice president of the Colonial and 2.24 vice president of the Bank of United 2.24 2.24 2.24 2.25 States
20.August 19, 1931The Evening SunBaltimore, MD
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ANK FAILURE TOTAL GIVEN OUT BY BOARD irst Seven Months Of Current Year Put Number At 778
VER 1928, 1929 TOTALS
Criticism Increasing Against U. S. Loans To Foreign
Countries
By C. B. Upham deposits less than half million. Special Dispatch to The Evening Sun] The record of 7,800 bank suspensions Washington, Aug. 19-The failure of since the first of 1921, with apparently an acceleration in the number of curfour banks with thirty-four branches rent failures, is causing more and more and resources of more than $100,000,000 demand that active measures be taken in an Ohio city gives added signifito put stop to it. More and more the cance to bank suspension figures recountry districts are inclined to blame leased by the Federal Reserve Board the laws or the Federal Administratoday. The reserve board compilation tion for conditions. There are increasshows that suspensions for the first ing criticisms of large Federal Reserve seven months of 1931 numbered 778. loans to foreign countries and to for which is not only more than for the first ten months of 1930, but more than for the entire year of either 1928 or 1929, or any other prior year with the exception of 1926. Similarly the deposits, nearly half Domino billion dollars. involved in the failures during the first seven months of this year are greater than those for any Largest selling entire year, with the exception of 1930 Only eight States and the District of Cane Sugar Columbia have escaped bank failures so far this year. Five of the States are On the air Saturday in New England, and the other New nights at 8.30 England State, Massachusetts, has had but one. Illinois leads with 105 and "Sweeten it with Domino" Iowa comes second with 65. The Toledo suspensions leave that city, of some 300,000 population, with two National banks, a trust company small State bank and two industrial banks, one of which operates on the Morris plan. Out of total bank deposits in the city of $184,000,000 last June there are now only some $50.000,000 in open banks. per cent. of the deposits in the city have been tied up by these four bank failures and that of large trust company in June. Simultaneously with the announcement of the Toledo suspensions word was received of the failure of the only two remaining State banks in Omaha, Neb. The situation there is not serious, however, as in Toledo because Omaha what is known National bank town. There are still six substantial National banks in Omaha Toledo, on the other hand. has been State bank town. It has only two National banks and one of them has eign banks, while no help seems to be forthcoming for the banks in distress at home. Regardless of the validity of these comments and criticisms, they are being made, and there is no easy answer to them that the ordinary run of bank depositor, and, incidentally, voter, can understand. Millions To Save Germany Millions, they say, have been sent to save the banks of Germany, hundreds of millions are being made available to other foreign banks, but the banks in one Ohio town cannot get help to save hundred million of the deposits belonging to its citizens. Theoretical economics and the hard facts of practical finance are not satisfactory answer to these people. Heretofore the demand for action has been scattered. for, while many banks have failed. there has been nothing quite comparable to the Toledo situation. Most of the failures have been of small banks, and in scattered rural areas. True, whole counties have lost their entire banking facilities, but they have been relatively unimportant counties financially. The Bank of United States failure was drop in the bucket of New York city's total banking resources. So, too, were the failures of numerous outlying banks of Chicago in comparison to "loop" bank resources. But now we have the elimination of seventy-five per cent. of the banking resources of an important city, in State which has both financial and political importance. It may bring action.
21.August 20, 1931Columbia Daily TribuneColumbia, MO
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Depositors Are Beginning to Ask Why Federal serve Should Go to Germany's Aid, but Permit Banks at Home to Go by the Board.
By UPHAM Special Leased Wire to Tribune Copyright WASHINGTON, D. Aug. failure of four banks with branches and resources than $100,000,000 in an Ohio city gives added significance bank suspension figures released by the federal reserve board today The reserve board compilation shows that suspensions for the first seven months of 1931 numbered 778, which is not only more than for the first months of 1930, but more than for the entire year either 1928 or 1929. or any other prior with the exception of Similarly the deposits involved the failures during the first months of this year. nearly half billion dollars, are greater than for any entire year with
TOLEDO BANK FAILURES MAY BRING SOME ACTION TO HALT MOUNTING FINANCIAL TOLL exception of 1930 Only eight states and the trict Columbia have escaped failures far this the states are in New Engand the other New England state, Massachusetts has had but one. Illinois leads with 105 and Iowa comes second with 65. The Toledo suspensions leave that city of some population with two national banks, trust company. small state bank and two industrial banks, one which on the Morris plan Out of total deposits in the city of $184,000.000 last there are now only some $50,000 per cent the deposits in the city have been tied up by these four bank failures and that of large trust company in June. Simultaneously with the nouncement the Toledo suspensions, word was received of the failure of the only two remaining state banks in Omaha, Neb The situation there not so as Toledo, because Omaha what known national bank town There are substantial national banks Toledo the other hand. has been state bank town has only two national banks and one of them has deposits than half million The record of bank sussince the first of an acceleration in the number of current failures. causing more and more demand that be taken put stop More and more the country districts are inclined to blame the laws of the federal administration for conditions There are increasing criticisms large federal reserve loans to eign countries and to banks. while no help seems forthcoming for the banks tress at home. Regardless the validity of comments and criticisms, they are being made, and there easy answer them that the ordinary run bank depositor and voter. understand. they have been sent to save the banks of Germany. hundreds of millions being made available to other foreign but the banks Ohio town cannot get help hundred million the deposits belonging to its citizens. Theoretical economics and the hard facts practical finance are not satisfactory answer these people. Heretofore the demand action has been scattered. while many banks have failed. there has been nothing quite parable the Toledo situation. Most of the failures have small banks. and rural areas. whole have their entire banking facilities, but they have been atively unimportant counties, nancially The bank of United States failure was drop bucket of New York city's total banking So were the failures of outlying banks of Chicago in comparison to bank But now have the elimination of per cent of the banking an state which has both financial and political importance may bring action.
22.December 26, 1931Green Bay Press-GazetteGreen Bay, WI
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Outlook for 1932
There been six stages of the process stocks, during which depreciaand directly influenced the per decline the associated the cent fall was the the end the spring 1930, when real intimation of prolonged was in the minds the banker and business occurred December, 1930. when confidence was shattered banking failures the and culminating episode the Bank United States New appeared slump this which recognition seriousness of Germany's credit The at the end of Augthe banks, the susBritain threat American withdrawnls gold United States nations. and was checked the early part October the formation the National Credit corporation. Basis of New Fortunes The which Dehas been due to tion of fear and of the Amerrailroad structure and alarm Germany's outlook During last phase depreciation for and bonds and for institutional hibited less resistance any the periods and disbe the of the thirty sixty that securities and commodities No healthy can fail appreciate the and foreign nations what would crisis in credit. reality of crisis those who must suffer from this son the that the Trend of Industry Charts the recording the of dustrial output the tribution kinds Most gains normal average. the finds industrial smaller percentage that which stood for some the low point the depression These been temporary and slight upward curves during the twelve in the second quarter when production averaged per its low level the last year fallMay per This was due to such influ-
23.April 29, 1932The Evening JournalWilmington, DE
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GOV. ROOSEVELT MEDAL HOLDER MASS. LT. GOV. IS WITNESS AT OPPOSES CASH ASSUMES POWER BRODERICK TRIAL BONUS FOR VETS WITH ELY AWAY
War Hero Declares Real Takes Part of Responsibility for Closing Bank Veteran Wants Job With of United Staes Living Wage
ECONOMIST ALSO BANK SUPT. IS HEARD AT HEARING ACCUSED OF NEGLECT
WASHINGTON April 29 NEW YORK April 29 An and joined Roosevelt day cash redemption witness the soldiers now in trial of Joseph Broderick Before House and means of Banks, committee, Professor Irving Fisher econom Richfor O'Neill, of New the Bank of United mer state chairman of the Disabled S American assailed the on for full payment Fisher would be blow of in failing to close the business He join than he he views previously expressed by chair beside Judge Meyer Secretary Mills and Eugene with his folded chairman of hands resting on unsound that was testified he had omically to inflate the by frequently Broderick the billion dollars pay bonus from 1929 holder of the bank closed of said needy and plain that he consider veterans should be that ed shared the responsibil real veteran wants of in the state wage The governor's his responwon the medal answer to of honor for bravery in France when question knew efforts to the bank his with the state opened argument with stronger ment As the governor replied "There are no about 200 banking insti He paid tribute to tutions in the of New York Patman D. and Rankin D that time under the jurisdiction of Miss. leading advocates for myself and superintendent of their sincerity in forwarding banks which were in somewhat ans legislation weakened due to the stock O'Neill assailed veteran for market crash using the cash bonus as The governor testified that he had cal football frequent conversations with Broderick regarding the condition of the REFUSE TO PROBATE Bank of United States, as well as other banks These conversations JOINT BROOKS WILL took place he said at Albany and at his home at Hyde Park Governor Roosevelt testified that of Gilpin while he was connected with FedWills today eral during the Wilson joint will he had heard much and Alfred about of Broderick who The by the Brooks chief examiner of the Fed was to was and eral and who later ment both in secretary of the Federal Reaccident Brooks died Board death The As to jected to the of the that the was not and was held today Broderick at time David Jr. represented Mrs of Brooks special prose- Register Highfield stated he cutor of of the the opinion upon of not the last was will and Brooks deference to the witness the and in his Steuer bate of the joint be to as to any other witness REDS IN CHILE CALL said Judge Donnellan The governor went on testify FOR MAY DAY STRIKE to of his Frank H. Warder No menof the Chile April 29 (AP) of Chile's army of 18,000 Carabineers de to Sing Sing was mobilized standing ready for whatever happen MonCity Trust Company day when groups tion case called a mass meeting and fa
Sends Message to Legislature Asking Revoke of Railway Contract
DENIES HE MADE ANY PROMISES
BOSTON Youngman R today denied he Governor Joseph Ely that would not the roumatters while attending the Youngman sent of the Legislature asking for legislation to agreed pay & York to pend der of resentatives Tuesday Ely in Informed in of Young that he the governor E he was breach of Governor out and first had with a He said he had revoof the the the a
24.April 29, 1932Palladium-ItemRichmond, IN
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ROOSEVELT ON STAND IN TRIAL
NEW April session marked frequent heated by Franklin testified today Joseph Broderick, superintendent banks. point, when the governor permission question Judge George Donnellan. siding trial, Steuer, special refused. Steuer refused the governor at the conclusion of direct and Governor Roosevelt excused Steuer's objections governor limitthe governor's testimony virtualstatement that he knew efforts to merge Bank United coupled with Broderick's tation as "none higher in the state of New York." Broderick trial for alleged neglect failing Bank of United States before he At point the speaking emphatically and raising his Steuer's under and banks.
25.May 20, 1932Oakland TribuneOakland, CA
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Conviction of Bank Officers Is Upheld NEW YORK, May appeliate division the supreme court today upheld the conviction of Bernard Marcus, president of the closed Bank of United States: Singer, executive dent, Singer's son, Herbert. officer in some the bank's affillates, charges funds the Safe Deposit company, subsidiary the bank. The Bank of United States. with closed 11,
